Housing production in San Francisco collapsed in 2022, falling 46% from a year earlier as the economic malaise caused by the pandemic and a sluggish recovery continued to hit the city’s construction industry, according to the Planning Department’s annual housing inventory released on March 1. was completed in April.
In 2022, developers completed construction of 2,257 units compared to 4,193 units in 2021, a 46% decrease from 2021. New construction in 2022 is 28% below the 10-year average of 3,119 new construction units per year.
While the trend isn’t surprising to those who walk the city streets and see the dearth of tower cranes that once dotted the skyline, it’s nonetheless troubling given that it comes at a time when San Francisco is undergoing a state-mandated rededication initiates, which should facilitate the production of 82,000 units over the next eight years.
“We’re seeing a trend that started before the pandemic with fewer units,” planning director Rich Hillis said. “Obviously that’s not what we want to see as we start implementing the case element. The question is what policy changes can be used to get projects off the ground.”
In the area of subsidized affordable housing, the numbers are not so bleak. Last year, 1,205 affordable housing units were completed, down 20% from 2021. But that’s just 2.5% below the five-year average of 1,228 affordable units per year. The new affordable apartments also have a higher share of all new construction than in previous years: 42% of all units were affordable.
About 72% of new affordable units are affordable for ultra-low, very low, or low-income households; This means a family of four earning between $43,000 and $83,000 could qualify.
The urgent need to spur housing construction has become a hot topic at City Hall, where Mayor London Breed and several members of the board of directors have introduced legislation to cut costs and red tape that have long made San Francisco one of the slowest and fastest expensive markets in the US to build in. A special committee is currently looking at lowering affordable housing requirements to resolve deadlocked developments.
While the delay between building control approval and the start of actual construction can be well over a year, the inventory shows some signs that activity is beginning to pick up.
In 2022, DBI approved construction of 2,738 net units compared to 1,958 net units approved in 2021, a 40% increase. The planning department approved and fully approved 28 projects totaling 1,378 units in 2022.
The report comes as several mega-projects are on hold in the city, including the redevelopment of major industrial sites such as Pier 70 in Dogpatch, Schlage Lock in Visitacion Valley and the former shipyard and Candlestick Point in the Bayview-Hunters Point neighborhood.
But other multi-phase developments are still cooking. About 1,000 units on Treasure Island are in the construction process at some point, and Strada Investment Group is rapidly building the 844-unit Brady Block on Market Street. In 2022, Strada and its partner Homerise completed 260 standard-market units and 96 low-income apartments for formerly homeless residents.
Strada partner Michael Cohen said the Brady Block lease has been solid despite record rainfall this winter that has continued to decline.
“Overall we have been pleased with the leasing process and look forward to completing the final building and park so that we can deliver everything the project is intended to be,” he said.
Cohen’s group also broke ground last fall for one of the larger projects, due to begin in 2022: a 500-unit building at Fourth and Bryant Streets in the south of the market. He said the lack of other housing starts in the city has inspired confidence in the future, despite the city’s not exactly stellar economy.
“The fundamental public policy issues remain acute: we still do not have enough housing for the people who want to live here,” he said. “As we look forward to the completion of the building, we anticipate that little to no inventory will be delivered at that time.”
Hillis said he remains hopeful the city’s potentially powerful housing engine can be fired up to meet housing goals. “Obviously that’s going to be a challenge, but given the size of our pipeline and our ability to rezone a significant portion of the city, if we pull the right levers, we can get there.”
Reach JK Dineen: jdineen@sfchronicle.com
